Steckler's Star Studded Stock Picks

[Runner]

<< Dave, what is a coil? >>

A coil is a pennant-like formation that can develop over a period of time that may be as short as a few bars or as long as several months. The pattern differs from a pennant in that there is no preceding sharp upswing in price - that is, there's no "pole." A good example of a coil is a symmetrical triangle.

Coils are consolidation (rather than continuation) patterns because of their tight trading patterns, with lower highs and higher lows. It is a largely unpredictable pattern because prices can break out in either direction; buyers and sellers are about equal in strength. I look at various technical indicators to help gauge in which direction the coil is likely to break out.

I got it now Dave. I like these coil things!!

[Runner]

Here is my example of the awesome COIL

[Runner]

On second thought AAPL does not fit the coil pattern because the move is a continuation move fr the larger trend? What is the formation pattern I have on APPL? I just thought it was a pullback

[DSteckler]

The move from October through mid-December was a rising trend channel. The move since then is a broadening top pattern (higher highs and lower lows). This pattern is found during the distribution phase of a stock's lifecycle.

[DSteckler]

Exits

The type of exits I use, if any, depend upon what strategy is in play.

Swing trades like the Cooper 1-2-3-4 selections use a sell stop of one or two ticks below the low of the day prior to the entry day. I sell half the shares once my reward equals my risk. E.g., if the sell stop is 1 point below entry, I sell half the shares after a 1 point gain. I then raise the stop to breakeven on the remaining shares and if the stock continues to rise, change that to a trailing stop. The trade usually exits after 3 - 5 days.

For my position trades which are typically held a few weeks to a few months, I don't use stops at all. The stocks are selected via fundamental filter screens (two value, two growth) and the position is held as long as the stock continues to appear on the screen. I run the screens once a month, at different times of the month depending upon the screen. Once the stock no longer appears on the screen, I exit the position.

An obvious question arisies here - what about a collapse or a swift drop in price? Do you still hold the position? The answer is yes. I manage risk in my position trades by typically holding 50 - 75 stocks at a time. Rarely does any one stock account for more than 2% of that portfolio so even if one stock fell to zero, it wouldn't too adversely affect my portfolio's value. The fip side is that a blowout to the upside doesn't help that much; basically, all gains/losses are incremental to the portfolio. My goal is to have steady returns even if that means the average return is smaller.

We've all seen times where we get stopped out and a few days or a week (or hours!) the stock is back above our exit price, sometimes substantially so. I decided a long time ago to eliminate the whipsawing by holding position trades as long as the stock continues to meet the criteria of my fundamental filter screens, regardless of its price action. Don't believe for a minute that the MMs don't pick off stops.

My Rydex fund positions have sell stops varying between 0% and 10%, depending upon the system. The positions are held for a predetermined number of days regardless of price action. After that time period has expired the position is held as long as: 1) it hasn't dropped more than "x" percent below entry price; or 2) it hasn't dropped more than "y" percent below the high price since entry; or 3) the Alpha of the fund is above a predetermined value. If any of these three conditions are met, the position is sold.

My ETF positions exit based on the same type of criteria as the Rydex fund positions.

[DSteckler]

Float &lt; 7 million, ERG &gt; 250

These charts look pretty good.

PTC
GROW
PARL
ATEA

NURO has retraced 50% of it's decline between the 11/23 high and the 12/27 low. It's sitting just below its 50DMA and if it trades above it, may bring in some technical buying.

[Runner]

Very interesting approach Dave. So basically you run your position trades for as long as they hit your screen. Only criteria used to exit is once it drops off screen.? I guess I could understand this approach if your holding 50-75 stocks. Looks like you have a few things in common with MM as far as diversity. With that many positions open at one time how do you handle the diversity on selection exposure. Example if 20 screen returns appear in energy how do you manage the exposure that you do not have to much weight in any one area? Is sector action important to you?
Do you have a system that you select a certain part of you port as large,mid, and small cap? Thanks for sharing. I’m always interested on exit plans as this is what counts maybe more then the entry.

[DSteckler]

<< if 20 screen returns appear in energy how do you manage the exposure that you do not have to much weight in any one area? Is sector action important to you? >>

Good question! Fortunately, the screens usually don't overweight in any one sector although early last year I was holding a large number of housing stocks. Worked out okay but I gave back about 2/3 of the gains before the stocks dropped off the screens.

<< Do you have a system that you select a certain part of you port as large,mid, and small cap? >>

No. I think that works to the detriment of the trader/investor, although there are plenty of financial planners who disagree with me. Maybe that's why my returns are better than theirs <VBG>.

[DSteckler]

<< Is sector action important to you? >>

Funny you should ask that. I developed three Rydex models, one of which is a sector rotation model. It buys from among 14 Rydex sector funds, so yes, sector action is important to me! In the position portfolios it is not as important; I buy what the screens tell me to buy and they've rarely been overweighted in any one or two sectors.

[DSteckler]

PD smashed

Phelps Dodge Slashes 4Q Profit Forecast

PHOENIX (AP) - Phelps Dodge Corp., one of the world's largest copper producers, said Tuesday fourth-quarter earnings will fall well below previous expectations, with higher copper prices, shortfalls in production and sales, and more one-time costs dragging down profits.


The company cut its earnings estimate to $1 to $1.30 per share for the quarter, down sharply from a prior forecast of $4.15 to $4.40 per share.


Phelps Dodge's new estimate includes a one-time charge of about $2.05 per share, whereas the previous forecast included a special charge of just 23 cents per share.


Shares of the company tumbled $14.30, or 9.3 percent, in electronic activity before the markets opened after closing Monday at $154.55.


Analysts, on average, have forecast Phelps' earnings at $4.76 per share for the quarter, excluding one-time items, according to Thomson Financial.


Phelps said its new estimate takes into account higher copper prices for the period that were offset by a price protection plan the company has in place, as well as shortfalls in production and sales of copper and molybdenum, a metal used as an alloy to strengthen steel and make it less susceptible to rust and corrosion.


The new forecast also includes more one-time costs that the company hadn't yet calculated when it issued its prior forecast in October, such as taxes on repatriated earnings from its South American mining operations and charges related to asset sales.
-----------------------------------------------------------------------------------------
It will be interesting to see if this spills over to other copper/metal stocks. The Mining - Misc. Ores group has been on a tear since late November. A 38.2% pullback of the move from the May low to yesterday's high brings the index back to around 108.38, just below its 200DMA.

There could be some good shorting opportunites in the group. Stocks in the group are:

AA
AAUK
ACO
AL
ANO
AWC
BBL
BHP
BVN
CCJ
CLF
CMP
CUP
DMLP
FAL
FCX
FNX
FRG
GNI
HL
INDEX
IVN
LCC
MDM
MSB
MXM
N
NGD
PAL
PCU
PD
RBY
RIO
RLO
RTP
SWC
WTZ

[RL]

Dave I never thought you were being evasive, guess I was looking for that golden egg without the work. Thats why when I was In business the young guys would all ways ask me how to be successful It's just hard work. As for the market I have read and read but It don't seem to sink In. So think I'll buy a stock that will go up In the long run and also swing trade It at the same time.Have a good day Dave I can see by the number of posts you are sure busy. Thanks for your time. HAVE A GOOD DAY catch you later.

[DSteckler]

GNT swimming against the tide

A tiddler that almost trades by appointment only, up 2.5% this morning.

[DSteckler]

Back in GRP

Let's see if it works out this time.

[DSteckler]

AMLN perking up

Making a new high. Volume is very strong for so early in the day.

[skiracer]

<worked out ok but I gave back about 2/3 of the gains before the stocks dropped of the screens>

Dave,
Not trying to knock you but I can't imagine giving back 2/3 of a position once I have those gains. Are these stocks that are in your long term portfolio? If they are do you set trailing stops to protect those gains if you have them. I know these positions will trend up and down over time but that seems like losing out on alot of your gains. Would it be that hard to place some type of trailing stop on them to help protect those gains without getting stopped out to frequently in the midst of an uptrending stock. You can always re-enter if you were to get stopped out. Just an observation.